Assignment_DBB1202_BBA 2_Set-1 and 2_Nov_2021


JUL/AUG 2021







Question 1(a)

Bookkeeping is a process of recording and organizing all the business transactions that have occurred in the course of business.  Bookkeeping is an integral part of accounting and largely focuses on recording day-to-day financial transactions of the business.

All the financial transactions such as sales earned revenue, payment of taxes, earned interest, payroll and other operational expenses, loans investments etc. are recorded in books of accounts.

The way the bookkeeping is managed determines the accuracy of the overall accounting process that has been followed by the business. Thus, bookkeeping ensures that the record of financial transactions

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Question 2(b)

1Cash AC Dr. Goods Dr. Furniture Dr. To Bank Loan To Captial (Being business commenced with cash, goods, and capital) 1,00,000 80,000 65,000      40,000 2,05,000
3Bank(SBI) Ac Dr. To Cash (Being bank account opened by depositing 50,000)  50,000  50,000
7Goods Ac Dr. To Discount To Amit and Co. (Being goods purchased on credit from Amit and co. worth 20,000 at 2% trade discount) 20,000  400 19,600
9Cash Ac Dr. To Sales (Being cash sales made) 65,000  65,000
10Ashish and Co. Dr Discount Dr. To sales (Being sales made on credit to ashish and co. worth 25,000 giving 3% trade discount) 24,250 750    25,000
14Profit and Loss Ac Dr. Bank AC Dr.(Insurance) To Goods (Being goods worth 1500 destroyed by fire and claim of 1000 received ) 500 1000    1500
15Amit and co. To Cash To Discount 19,600  18,800 800
26Shares(HDFC) Dr. To Bank Ac (Being shares purchased for 15,000) 15,000  15,000
29Rent Ac Dr. To Bank Ac (Being Rent paid) 2,000  2,000

Question 3(a)

The Trial Balance is not absolute proof of the accuracy of ledger accounts. It is a proof only of the arithmetical accuracy of the postings. The total of debits may be equal to the total of credits yet still there may be errors.

Such errors are not disclosed by a trial balance and they are:

1. Errors of Principle:

An error of principle is an error which violates the fundamentals of book-keeping. For instance, purchase of furniture is debited to Purchase Account, instead of Furniture Account. These types of

Question 3(b)

Financial statements are quantitative statements, based on numbers. However, the information they provide to the users have some important qualitative characteristics that enhances the utility of the same.


One of the most important features

Set- II

Question 4(a)

Trading and profit and loss Account

To Opening Stock To Purchases  12,000  Purchase return (2000) To Gross Profit     To Depreciation on Furniture To advance commission To Establishment Expenses To Tax and Insurance 500 Outstanding                 200 Prepaid                         (50) To Bad debts To Provision for Doubtful debts To Outstanding salary                     To Net Profit  3000 10,000         5500By Sales    15000 Sales return (1000)   By Closing stock     By Gross Profit Ac By Commission  500 Advance            (100)  14,000     4500
  60 100 2200            650           500         300             100         1,990  5500 400

Question 4(b)

There are many reasons because of which there is always some difference in passbook and cashbook balances, and some of these are discussed as under :-

1. Cheques issued but not yet presented for payment in the bank

When a cheque is issued to a creditor by the firm, it is immediately recorded on the credit side of the bank column

Question 5(a)

A drawer or the seller draws a bill of exchange on the drawee or the purchaser in order to ensure that the latter will pay him the amount due. However, if the holder or the drawer of the bill of exchange needs funds or money before the due date or the maturity date of the bill, he may opt for

Question 5(b)

Revaluation Account


Question 6(a)

Types of Share Capital of A Company

1. Authorized Share Capital

Authorized Share Capital is the total Capital that a company accepts from its investors by issuing shares which are mentioned in the official document of the company. It is also called as Registered Capital or Nominal Capital because with this Capital a company is registered.

2. Issued Share Capital

Issued Share Capital

Question 6(b)

When a company has substantial cash resources, it may like to buy its own shares from the market particularly when the prevailing rate of its shares in the market is much lower than the book value or what the company perceives to be its true value.

This mode of purchase is also

Question 6(c)(i)

Capital Redemption Reserve- Capital redemption reserve account is a type of reserve maintained by a company limited by shares and as the name suggests this reserve deals with shares which are redeemable. The shares which are purported to be redeemed are paid out of the profits of a company. For this purpose, out of the profits, an amount equivalent to the nominal value of the share supposed to be redeemed is transferred to a reserve. This reserve is called a capital redemption reserve account.

A capital redemption reserve account can be used to pay any unissued shares of the company to be issued as fully paid bonus shares to the members of the company. A company buying-back its own